"Like the US, Japan, and Germany... South Korea's Automotive Semiconductor Industry Must Grow According to Vehicle Production Scale"

[Asia Economy Reporter Jeong Hyunjin] Amid the prolonged global shortage of automotive semiconductors, there are calls for South Korea to develop the next-generation automotive semiconductor industry and establish a stable automotive industry ecosystem.

According to a report titled "Current Status and Strengthening Measures of the Domestic Automotive Semiconductor Industry" released on the 29th by the Korea International Trade Association's International Trade and Commerce Research Institute, a comparison of the global market shares of major countries in the automotive sector showed that the United States had the highest share in terms of vehicle production volume at 11.7%, followed by Japan at 10.5%, and Germany at 5.5%. In terms of export value, the shares were 8.1% for the United States, 11.9% for Japan, and 17.0% for Germany. At the same time, the global market shares of automotive semiconductor sales were 31.4% for the United States, 22.4% for Japan, and 17.4% for Germany, with all three countries having shares similar to or more than three times higher than their automotive production and export shares.

In contrast, South Korea's global automotive market share was 4.3% based on production volume and 4.6% based on export value, but its share of global automotive semiconductor sales was only 2.3%, about half of its automotive production and export shares.

The Korea International Trade Association explained, "South Korea's high dependence on overseas sources for automotive semiconductors is due to the high market entry barriers and difficulty in achieving economies of scale in automotive semiconductors, as well as their lower profit margins compared to semiconductors for other industries." It also revealed that more than 70% of domestic semiconductor companies focus on advanced processes for home appliances and IT devices, making it structurally difficult to increase production of automotive semiconductors, which use older processes, in the short term.

The association stated, "As the future mobility industry trends shift towards the expansion of in-vehicle electrical and electronic components and software, advancement of vehicle connectivity and communication networks, and autonomous driving, the added value of automotive semiconductors will increase further," adding, "To sufficiently support the demand of the automotive industry, a key foundational industry, we must strengthen the basic competitiveness of the automotive semiconductor industry, focusing on areas where we have strengths."

It continued, "First, it is necessary to secure production capabilities for high-performance and high value-added semiconductors used in advanced driver assistance systems (ADAS), autonomous driving, and infotainment functions that provide customized services to vehicle users, as well as diversify the industrial portfolio to include artificial intelligence (AI) semiconductors and power semiconductors," advising, "It is also important to strategically respond to technological changes where industry boundaries are breaking down due to domestic and international technological cooperation, robotics, and the Internet of Things (IoT)."

This content was produced with the assistance of AI translation services.